This webinar shows a PowerPoint presentation with three presenters appearing one at a time. The main presenter, Patrick Charles, describes the text of the presentation as it is shown on the screen.
00:00:00:00 - 00:00:31:02
Natacha Dunker
Good afternoon everyone. Thank you so much for joining our latest webinar, Legislative updates. And which will go over recent legislation. My name is Natasha Dunker. I'm communications director for Perak. Again, thank you for joining us. Any board members who are attending this live session, you will automatically receive three educational credits. It will be posted to your account in approximately one week.
00:00:31:04 - 00:00:58:02
Natacha Dunker
We will also be recording this session and posting it to the website at a later date. So anyone who's not able to attend today's session but views the recording can also, get three credits by submitting a training affidavit in Prosper. The questions we will have, questions, available during this session. Please open up your Q&A and submit your questions that way.
00:00:58:02 - 00:01:20:01
Natacha Dunker
And Patrick will, read off the questions as time allows. The handout was emailed to you. A link to the handout was emailed to you. But if you did not get a chance to download it, I will post a link to that in the chat. And with that, I will turn it over to Patrick Charles, our deputy director.
00:01:20:03 - 00:01:22:19
Natacha Dunker
Thanks, Patrick.
00:01:22:21 - 00:01:44:02
Patrick Charles
Good morning everyone. As Natasha mentioned, I'm going to be covering the recent legislative updates. This is very similar to the presentation that was done on emerging issues. So if you were there, you will have seen a lot of this. We have a little bit more information as I had mentioned. At that point, we were still working on two of the acts and how to implement them.
00:01:44:02 - 00:02:04:01
Patrick Charles
The return to service section that we'll talk about in a few minutes, and also the violent Act injury bill. And we're getting ready to issue memos on those probably early next week. It's possible it might go out late this week, but most likely early next week. So what are the topics that we're going to cover today? There are five basic topics we're going to cover today.
00:02:04:02 - 00:02:27:11
Patrick Charles
The first one is going to be chapter 141 of the acts of 2024. This is an act related to salary range transparency. And it has two components, one of which is an anti spiking element dealing with systemic wage adjustments and wage adjustments that were done pursuant to MEPA, the Mass Equal Pay Act. And the second one has to do with post retirement earnings and clarifying language in the statutes.
00:02:27:11 - 00:02:54:10
Patrick Charles
Section 91, regarding how much an employee can earn after they retire and what salary they base their earnings capacity upon. The second thing we'll cover is chapter 140 of the acts of 2024, which is the fiscal 25 budget, and there were returned to service changes there. That's the situation where a member goes out on disability and gets reevaluated periodically to see if they are physically or mentally capable of returning to employment.
00:02:54:12 - 00:02:58:19
Patrick Charles
There were some changes to that that will cover.
00:02:58:21 - 00:03:20:14
Patrick Charles
As I mentioned, the Violent Act injury bill, that's chapter 149 of the acts of 2024, An Act Relative to Disability Pensions and Critical Incident Stress Management for Violent Crimes. This provides a 100% disability to certain public employees who meet the requirements of the Violent Act injury definition, and I'll cover all of that. And who's going to be eligible?
00:03:20:14 - 00:03:41:15
Patrick Charles
Who won't be eligible? Go over a couple of scenarios for that. And then the last thing is chapter 178 of the acts of 2024, an act honoring, empowering, and recognizing our service members and veterans. This is the Hero act. It's commonly referred to as the Hero act. There is a separate webinar that was done in August that is available on our website, and you can watch that.
00:03:41:15 - 00:04:02:07
Patrick Charles
It's a much longer explanation of all of the Hero Act and veterans buyback changes. It's about an hour long, I think. So I won't be covering every aspect that was covered in that today, because we have the other four areas to cover. The first thing we want to talk about is the Salary Transparency Act. With regard to anti spiking.
00:04:02:09 - 00:04:32:03
Patrick Charles
So anti spiking is contained in general law. Chapter 32 section 5(2)(f) And this is the situation where you look at the salary. And if it goes up by 10% over a two year period that there's a spiking issue and the regular comp has to be reduced and the calculation has to be recalculated. There are a number of exceptions in 5(2)(f) , and one of them has always been, if your salary is set by collective bargaining agreement.
00:04:32:05 - 00:05:04:17
Patrick Charles
And what one of the things that we found, though, going forward over the last couple of years, is that there was an issue with MEPA the Mass Equal Pay Act, and individuals were getting pay raises because it was determined that based on a gender equity study, that a group of people were being paid less than their counterparts and they were getting raises, and sometimes those could be ten, 15, 20% raises, and then they were going to retire during the three year period that their salary would be calculated upon.
00:05:04:17 - 00:05:26:06
Patrick Charles
And we were unfortunately forced to tell them. The statute says that if you get a pay raise of a certain amount, and it doesn't meet any of these exceptions. We have to reduce your benefit. And so these people were underpaid, being told that they were underpaid for a specific reason and had their salaries adjusted and then their pensions were then being impacted.
00:05:26:08 - 00:05:49:03
Patrick Charles
And so the new language adds, for a bona fide increase in salary related to eliminating wage differentials as required pursuant to section 105 A of chapter 149. That's the MEPA law or and this is something the legislature added from an employer systemic wage adjustment.
00:05:49:05 - 00:06:09:01
Patrick Charles
So an increase in salary done following a meet the study will no longer trigger anti spiking. And so that's a pretty straightforward thing that if the employer does the MEPA study, they you question the salary and why there was an increase. And the employer comes back and says we did a MEPA study. The salaries had to be raised because of it.
00:06:09:03 - 00:06:36:18
Patrick Charles
It's an exemption. That's pretty much the end of your anti spiking inquiry. The employer systemic wage adjustments is a little bit different because this is not necessarily due to a wage study under MEPA. This could simply be that the employer increased salaries across an employer or a segment of the employer. For whatever reason they wanted. They could have just determined that, you know, in order to keep this whole unit together, we need to increase the salaries.
00:06:36:18 - 00:07:11:07
Patrick Charles
And so there that would be also be subject, not subject to spiking, and it would be an exemption to anti spiking. And the important thing here is the effective date of this is July 1st 2018 for both of these changes. Why is that important? Because July 1st, 2018 is when the MEPA law went into effect. And so anything done after that, if there was any anti spiking because of a salary increase, that may have been MEPA or anything, but they're wrapping this backwards so that those would be exempt now and some re calculations maybe needed to do so.
00:07:11:07 - 00:07:32:05
Patrick Charles
We issued a memo 21 of 2024. And we list out a bunch of steps that boards need to take. In particular, we want to make sure that all the retired members of the system who add anti spiking provision of section 5(2)(F), apply to their allowance on or after July 1st, 2018, that they are rechecked to make sure that they are still subject to anti spiking.
00:07:32:05 - 00:07:53:18
Patrick Charles
Some of them will be because not every salary adjustment that was done over the last six years was because of MEPA or because of a systemic wage adjustment. We often see people who simply got a 10% raise one year and a 10% raise the next year, and they retired a year later. Determine whether any of the received salary was pursuant to MEPA or a systemic wage adjustment.
00:07:53:18 - 00:08:15:10
Patrick Charles
If it was, then you're going to recalculate and remove the downward adjustment for spiking. After adjusting the allowance, the board must refund to the member the underpayment amount of their allowance plus correction of errors. Interest rate. Now, on this point, one of the questions that we have received since we issued our memo is why are we paying corrections of interest rate?
00:08:15:12 - 00:08:36:06
Patrick Charles
If the board didn't make an error when they did, the original calculation? And that is true. The board did not make an error. The board did everything correctly according to the statute. But because the legislature has retroactively applied this to July 1st, 2018, they have essentially made any calculation done an error, even though at the time it was done it was not an error.
00:08:36:11 - 00:09:04:15
Patrick Charles
It's a convoluted system in a way, but that's why the correction of errors interest applies. Because though there wasn't an error when you did the calculation in, say, July of 2020, the legislature has now determined it was an error. And so we have to correct it and use correction of errors, interest rate. You can offset the lump sum payment to be made to the member by the amount of any contributions that were returned to the member when anti spiking was applied.
00:09:04:16 - 00:09:12:24
Patrick Charles
Now, the second aspect of the Salary Transparency Act dealt with post retirement earnings.
00:09:13:01 - 00:09:37:24
Patrick Charles
And this is an amendment to the salary that's used when calculating retiree earnings pursuant to section 91. Little B. PERAC has long held that you could use the salary from the position from which you retired, or the salary upon which your pension was based, in order to calculate your post retirement earnings, whichever was the greater salary. The issue here can be what the statute says.
00:09:38:05 - 00:10:01:18
Patrick Charles
It's the salary being paid for the business and from which the member retired. Well, if you were a 35 year employee getting the top pay rate for that job, and you are then replaced by someone who gets less money, then who's going to be paid the less than you? What that would mean under that definition is that your earnings capacity has to use that new employee salary.
00:10:01:20 - 00:10:27:03
Patrick Charles
So if you were making 100,000, but the replacement employee was only making 90, you have to use 90 in the calculation of your post-retirement earnings, which artificially reduces your earnings capacity. And PERAC had always maintained that you would use the salary upon which your pension was based, because that would allow you to have earnings, because we have, in fact, seen situations where someone retires and their replacement makes significantly less than they do.
00:10:27:03 - 00:11:08:17
Patrick Charles
And in fact, that negates all earnings capacity. And obviously, the legislature, in putting 91 little B into the statute, is acknowledging that an earnings capacity should be had by pretty much everyone who retires. They are just simply restricting the amount and the length of service you can provide in terms of hours. So there was a Dixon versus Lynn Retirement System case that that CRAB and this was a situation where the gentleman in question had a higher paying job in the middle of his career, lost that job because the job was eliminated, wanted to get more creditable service to get to his 80%.
00:11:08:19 - 00:11:43:22
Patrick Charles
And so he took a much lower paying job to do. His last years of creditable service. And when he retired, the board applied the salary from the position for which the member retired, which was significantly lower than what his pension was based upon. Roughly, his pension was based upon a $90,000 salary, but he was only earning $20,000 a year in his final few years of work, so he had a 0%, earned a zero earnings capacity, and he was fat, in fact, found to owe around $50,000 because he had over earned for a couple of years, even though.
00:11:43:22 - 00:12:16:06
Patrick Charles
And when he retired, when he went back to work, he was still only earning less than $20,000. But it added up over the three or so years that he was doing it. So we went to the legislature and asked that some amendments be made to the statute to correct this, because we felt that preserving an earnings capacity was was important, especially since the legislative intent has been clearly established to allow earnings capacity, because over the last decade or so, maybe 15 years, you've seen an increase in the hours and limitations.
00:12:16:06 - 00:12:35:18
Patrick Charles
From 960 to 1200, the legislature has increased the salary by allowing an extra $15,000. And so they've obviously intended for people to be able to work. So we asked the legislature to correct this, and that's why they now use either the salary from the position for which the member retired, or the salary upon which the retirement allowance is based.
00:12:35:20 - 00:12:58:24
Patrick Charles
What is the salary upon which a retirement allowance is based mean? Essentially, if you take a look at that person's retirement calculation sheet and you see what the option A amount was, what salary was used to calculate his option A, and that's the salary that upon which the retirement allowance is based, and that's the salary that they can use to determine their post retirement earnings.
00:12:59:01 - 00:13:18:08
Patrick Charles
The next section has to do with the return to service provisions. And this was found in the budget. And this is talking about section eight of chapter 32. Whenever a member is retired for disability, they have to be evaluated periodically. I believe it's once every year for the first two years, and then it's every three years thereafter.
00:13:18:10 - 00:13:43:02
Patrick Charles
They're evaluated by our doctors, to determine whether or not they can return to their former position. It's the requirement under section eight. It's a statutory requirement. And if a member previously a member had to be able to return to the position that they retired from or a similar position with the same employer. So this is very limiting.
00:13:43:02 - 00:13:59:19
Patrick Charles
in who can go back to work. And even if they are cleared medically, there may not be a job for them. We've seen a number of situations over the years where a person was returned, was able to return to work. Our doctors had cleared them throughout the whole medical process. They reviewed their medical records. They've done an in-person review.
00:13:59:19 - 00:14:18:06
Patrick Charles
They had three unanimous medical panelists say, yes, they can return to their job, but they had a job in which there was only one of those positions in the town, and that position was obviously filled during the period they were on disability, and so there was no job for them to return to, and so they could sit for years.
00:14:18:06 - 00:14:48:21
Patrick Charles
On the return to service wait list, hoping for a position to open up. The legislature saw this, and they took action to change section eight to allow a member who's retired for disability to be cleared to return to service with their original position, with the original employer or with a different employer. So if you're the water water treatment operator in town X, and there's no job for you there, but you were able to return to work, you can go to town Y and work as a water operator.
00:14:48:23 - 00:15:10:06
Patrick Charles
Same job, just a different employer. No different evaluation needed for your returned for one. It would carry out as long as the job description for the two are equal, you would be able to go to that second employer. The other component that was added here is completely new and something that has never existed before in section eight.
00:15:10:08 - 00:15:42:07
Patrick Charles
And this is that a member may request that they be evaluated, evaluated for a completely different position, and that different position could be with the same employer or with a different employer. Even if that different employer is in a separate retirement system. So for instance, I use the example of a police officer who is no longer physically able to do the police work, but they have a law degree, they're licensed to practice law in Massachusetts, and there's a town council position open or a position with the state agency.
00:15:42:07 - 00:16:04:06
Patrick Charles
As a lawyer, they could ask to be evaluated for that position, which does not have believe me, lawyers do not have the physical component requirement of their job duties as police officers or firemen, so they might very well be capable of doing that job, but not actually perform the physical aspects of their police work job. So they could ask to be evaluated for that position.
00:16:04:08 - 00:16:24:20
Patrick Charles
And then we would determine whether or not they were physically able. And how we do that is the member must provide us with a new job description for that job, that new position, and it has to show the essential duties of that position just the same as when someone retires for disability. We need to see their job duties.
00:16:24:23 - 00:16:44:15
Patrick Charles
What are the essential duties of the job so that our medical panels can evaluate whether this person is physically and mentally capable of returning to work in that position? So you go through the same return to service examination process. Only our doctors will be looking at your original job duties to see if you can return to that position.
00:16:44:15 - 00:17:06:16
Patrick Charles
But we can also if you request this, if the member requests this, they can be evaluated for a second position. And I can't stress this enough. This is something that the member must request. This is not something that an employer can require that a retirement board can require. It's the secondary evaluation for a new position must be at the request of the member.
00:17:06:18 - 00:17:26:14
Patrick Charles
And so if you're found able to return to the same position, you go through the regular RTS process as it's always happened in the past, if you're found able to a different to go to a different position with the same employer, then you can be returned to the same retirement system like before and receive credible service for all the time they were receiving disability.
00:17:26:16 - 00:17:50:10
Patrick Charles
Now, if you're able to go to a new position and it's with a different employer, this may be in a new retirement system, the same process that happens currently for someone returning to the same employer with the same retirement system will happen with regards to creditable service, the member is going to be giving creditable service for by the first system from which they had retired for disability for the entire period that that disability was collected.
00:17:50:12 - 00:18:21:14
Patrick Charles
They will then become a new member in service of the second system. That second system will then have to be responsible for any creditable service that accrues from the date that they join that system, until they eventually retire. So if the member is fortunate enough to return to work at a different system and then go out on superannuation liability will be the same as it's always is for a member who has service in two or more systems, 3(8)(c) will apply.
00:18:21:16 - 00:18:39:21
Patrick Charles
The liability for the first system will be all the period that they worked in the first system, plus any disability time. The second system, it will be any time that they have worked since returning from disability in that second system. So on down the line to if you can be transferred to a third system and have two, 3(8)(c)’s , that's fine.
00:18:39:23 - 00:19:04:20
Patrick Charles
It's the same process as a normal 3(8)(c). If the member returns to a second system and then goes out and disability based on the original injury, the first system will be assessed a portion of the liability under section seven five of chapter 32. And That liability will be so the retirement will actually be from the second system then.
00:19:04:24 - 00:19:21:02
Patrick Charles
But there'll be some apportionment of the liability even though the disability may have, the injury may have occurred in the first system or the underlying condition occurred in the first system.
00:19:21:04 - 00:19:55:20
Patrick Charles
The next statute is chapter 149 of the acts of 2024. This is the violent Act injury disability bill. And we're going to commonly refer to it as the Violent Act injury Bill because the title of it is extremely long and the majority of it is referencing this violent act injury that is the key focal point for the for determining the eligibility of an individual under this provision. It amends section seven, to provide a 100% disability to police, firefighters, EMTs and some licensed medical professionals.
00:19:55:23 - 00:20:16:15
Patrick Charles
I forgot to put those on the slide. It's a 100% if they are disabled as a result of a violent act injury, and the statute provides this definition, and I don't like to read definitions too often, but this one is very complex and it's going to be. The wording is very important for the underlying determination of whether someone is eligible.
00:20:16:17 - 00:20:43:15
Patrick Charles
Violent act injury is a catastrophic, life threatening or life altering and permanent bodily injury sustained as a direct and proximate result of a violent attack upon a person by means of a dangerous weapon, which is designed for the purpose of causing serious injury or death, including but not limited to a firearm, knife, automobile, or explosive device. So as I mentioned, this is a 100% disability benefit.
00:20:43:15 - 00:21:10:09
Patrick Charles
Unlike traditional section seven benefits, in which you get a 72% disability plus an annuity factor, and if you're hired after the late 1980s, you're capped at 75%. This is a 100% benefit, and it's only available for people. Again, I'm going to keep stressing this, who have catastrophic, life threatening or life altering permanent bodily injuries. It must be a physical injury.
00:21:10:11 - 00:21:40:01
Patrick Charles
The statute does not permit for emotional psychological injuries to be eligible for the 100% benefit. This is because they have amended the standard to determine if someone is disabled under the 100% provision under the Violent Act injury, it must be physically incapable of doing the essential duties of the member’s position. And as I mentioned, the injury must be the result of a violent attack upon the member by means of a dangerous weapon.
00:21:40:03 - 00:22:24:23
Patrick Charles
The dangerous weapon issue is one of the definition. It's issues. That is going to probably be the most problem problematic, burdensome because it is not just a weapon. It has to be a dangerous weapon that was designed for the purpose of causing injury or death. And they list out these firearm, knife, automobile, explosive device. Those are obviously not the only dangerous weapons in the world, but it really does limit it, because anything that is used in the attack could be considered by many people to be a dangerous weapon, but the statute does not contemplate it unless the implement used, the weapon used was actually designed for the purpose of causing serious injury or death.
00:22:25:00 - 00:22:55:22
Patrick Charles
So what does that mean in terms of what are some examples? It if someone is physically assaulted by another person with no weapon involved and they suffer severe grievous injuries, they're not covered by this because they were not attacked by a dangerous weapon. So if someone injures you by pushing you down the stairs or kicking you or punching you, there's no weapon involved other than the person's body, which is not considered, a dangerous weapon under this definition of being designed for the purpose of causing injury or death.
00:22:55:24 - 00:23:19:20
Patrick Charles
So those are some examples where, though you may have grievous injuries that might be catastrophic, life threatening or life altering, it has to meet the other criteria as well. And being a violent attack with the means of a dangerous weapon. Other items. There are other household items that might be grabbed in the heat of the moment. When a police officer breaks down a door or chasing a suspect, they may grab an implement off the street.
00:23:19:23 - 00:23:30:18
Patrick Charles
But again, if that is not a dangerous weapon designed for the purpose of causing serious injury or death, it's not going to qualify under this statute.
00:23:30:20 - 00:24:03:20
Patrick Charles
It's a 100% disability. How is that hundred percent disability calculated? It's 100% of their regular compensation, including all benefits and stipends that the member was earning on the date of the violent act injury, as long as those benefits and stipends were pensionable. So things like longevity would be included. If you had a hazmat stipend that was regular comp, that would be included, their shift differential would be included because that was an includable pensionable amount in your while you were working.
00:24:03:20 - 00:24:30:13
Patrick Charles
It would continue going forward and it would be this 100% disability is similar to a section 100 benefit, with the exception that the member is still alive, obviously under the section seven disability, but the calculation is basically the same. You're getting 100% and it's going to be adjusted any time the salary for that position is adjusted. So that could be annually if it's an annual collective bargaining agreement raise, or if this position is raised on an annual basis.
00:24:30:15 - 00:24:54:05
Patrick Charles
But any time the salary is increased for the active member holding that position, the disability allowance will be increased as well. Mandatory retirement age if a member is a member, will receive 80% of the annual rate of compensation paid in the previous 12 months when they reach a mandatory retirement age. So this means you take whatever the 100% benefit was that they received in the previous 12 months.
00:24:54:05 - 00:25:19:23
Patrick Charles
When they turn 65, you go calculate that and reduce it to 80% going forward. Now, some of the people listed in the eligibility for the Violent Act injury police, fire, they're subject to mandatory retirement age of 65. Other members that may be eligible for this benefit are not subject to a mandatory retirement age, so their benefit will not reduce to 80%.
00:25:19:23 - 00:25:45:02
Patrick Charles
It will stay at 100% going forward and will be, calculated annually as if they were continuing to work. The other one of the other benefits of this act is as soon as someone is approved for the 100% under the Violent Act injury, they will receive a return of their total accumulated retirement deductions. Similar to what happens in section nine with there's if there's any deductions left that's returned.
00:25:45:04 - 00:26:18:10
Patrick Charles
This is returned while the member is alive to the member. If the member is married, the spouse will receive 75% of the member's pension. Upon the death of the member. This 75%, if the member dies while they are under the maximum age, or while they're still receiving a 100% benefit, the spouse will receive 75% of that. If it's an 80% because the member has already been retired, at the mandatory or sorry, the member has already reached the mandatory retirement age, then their benefit will be 75% of that 80%.
00:26:18:12 - 00:26:26:05
Patrick Charles
It's always going to be 75% of whatever the member is receiving at the time of death.
00:26:26:07 - 00:26:48:05
Patrick Charles
There are also provisions to provide for the children, if they are underage or incapacitated from earnings. Much like some of the other benefits in chapter 32, that the child will get those benefits if the member and the spouse are predeceased them, then the children, if they are incapacitated or if they're underage, will get the benefit.
00:26:48:05 - 00:27:09:03
Patrick Charles
It will be split among the eligible children. One thing is that the total amount is split equally. So if there's three children, each one would get a certain percentage. And when one of those either ages out or is no longer incapacitated, whatever the case may be, and they're no longer eligible for the benefit, the other two continue to receive the same amount.
00:27:09:03 - 00:27:35:21
Patrick Charles
It does not get re apportioned to a higher amount to account for there being only two beneficiaries. Rather than three. There are also some changes to the post-retirement disability earnings limitations for people that are, approved for the violent Act injury benefit under section seven. As you know, currently, members who go out on disability are subject to 91 A earnings limitations, which is a dollar amount limit.
00:27:35:23 - 00:28:10:17
Patrick Charles
And they're also subject to 91 little B earnings restrictions if they are working in the public sector here, the legislature has, exempted disability retirees under under this section seven enhanced violent act injury disability. They've exempted them from those earnings restrictions. And they have created new earnings restrictions for them. And if a member goes back to work in the public sector, they can earn 50% of their retirement allowance, as long as they are not going back to work in a group 3 or 4 position.
00:28:10:19 - 00:28:31:03
Patrick Charles
But they are allowed 50% from the public sector. But if they go to work in the private sector, which under normal 91A rules, you would still be subject to earnings restrictions, those earnings restrictions are lifted. And if you work in the private sector while receiving this violent act injury, disability, you have unlimited earnings and there's no hours or any tracking of your earnings at that point.
00:28:31:05 - 00:28:40:23
Patrick Charles
If you're only working in the private sector.
00:28:41:00 - 00:29:06:02
Patrick Charles
The next act is chapter 178 of the acts of 2024, which is the Hero Act. This is your veterans buyback. And as I said, there is a about a one hour, 1.5 hour webinar that is available on our website that you can watch to get a little bit more information. And there's also a Q&A handout. We responded to the Q&A in writing and posted that on our website as well.
00:29:06:06 - 00:29:37:00
Patrick Charles
So there will be a number of questions that may be answered if you just take a look at that. But I'm going to go over the basic provisions and not quite in the same amount of detail. So what is not changed? The definition of veteran in chapter four, section seven, clause 43rd has not changed. This is important because if you actually look through the hero act, there are a couple of places where they have amended the definition of veteran in other sections of the law that deal with different veterans benefits, nonpublic employee veteran benefits.
00:29:37:05 - 00:30:03:11
Patrick Charles
But those changes did not have any impact on the retirement system because the definition that we use for purposes of veteran under chapter 32 is contained in clause 43 and has very specific provisions, there's no change to the amount of time that can be purchased. You can still purchase four years of prior military service. This can be a combination of, National Guard and reserve time at a 5 to 1 ratio.
00:30:03:11 - 00:30:27:05
Patrick Charles
Or it could just be someone joined the Army at 18, got out at 22, became a police officer, a teacher, whatever. Had four years of military service prior to their ever being a public employee. There is going to be some overlap, which I'll mention between you could have some prior service, but then you may still accrue more service because you're in the reserves or the guard while you're a public employee.
00:30:27:07 - 00:31:01:16
Patrick Charles
The amount that you have to pay to purchase each year of service has also not changed. It is 10% of the regular compensation when the member most recently established membership in the system. We've gotten some questions about what is this most recently established membership mean? If a member joins the system and does not purchase their military time, and after 3 or 4 years, they leave the system and withdraw their money and then five years later, they come back into the system and they redeposit and rejoin the active service in the system.
00:31:01:18 - 00:31:25:00
Patrick Charles
It's the second system or the second, employment, the salary that you use. Because as soon as someone withdraws their money, they sever all ties and all rights to any benefits under chapter 32. And so they no longer can use their first year salary. They have to use the most recent entered system. But if someone simply transfers from one system to another, they work for years in one.
00:31:25:00 - 00:31:44:13
Patrick Charles
Then they transfer the second system. No withdrawal, even if there's a break in service, but there's no withdrawal, you still use the first year salary and you'll have to get salary information from that, even if they are in a separate system now with a totally different job. There's also still the 5 to 1 ratio for National Guard and active reserve time.
00:31:44:15 - 00:32:11:16
Patrick Charles
The key to this provision is you must qualify as a veteran to be eligible. I have told this story in every veteran's training I have given, but I have seen members who had 20 years in the National Guard and who did not qualify as a veteran under the statute because they did not have enough active duty time. They only had active duty for, their weekend a month, their two weeks a year, their initial active duty training for boot camp.
00:32:11:18 - 00:32:34:08
Patrick Charles
But that does not qualify them unless you have the necessary 90 days, one of which is war time, or 180 days of active service, regardless of wartime status. And that's brings us to the next point, which is that active duty for training for the National Guard or reserves is excluded. National guard training for and reserve training does not qualify you as a veteran.
00:32:34:11 - 00:33:20:04
Patrick Charles
It is also not considered active duty for purposes of buying time at a 1 to 1 ratio. So if someone, is in the National Guard and they get activated for, say, 15 months prior to ever becoming a public employee, they get active, active duty. Maybe there's, you'll see this a lot people may have been sent over to Iraq or Kuwait, Afghanistan for 15 months on the National Guard or as a reservist when they come back and when they join your system that 15 months is active duty under the national authority, and they are eligible to buy that 15 months straight as if it was regular Army or regular Navy, regular Air Force
00:33:20:04 - 00:33:40:02
Patrick Charles
time. That is not true for the active duty, where they are in full time active duty for the six months of their boot camp. That does not ever become day for day purchasable. It's just simply added to and calculated in the total guard and reserve time. When you do the 5 to 1 ratio. The other thing is active duty.
00:33:40:02 - 00:34:06:13
Patrick Charles
Lead time cannot be counted towards a buyback. So this is the situation where you are in the Reserves or the Guard. You're a public employee. Three years into your public employment, you get called to active duty with the guard or reserves. You spend a year away and then you come back to employment. When you come back to employment under 4(1)(h) and chapter 32, you get creditable service for that year that you were deployed or that you were on active duty.
00:34:06:15 - 00:34:27:18
Patrick Charles
Then when you go to purchase your military service at the 5 to 1 ratio, you qualify as a veteran. Yes. And you can do it. And maybe you have 15 years in the guard total, but if you were activated for that one year, you have to subtract that one year from the calculation of the 5 to 1 ratio, because you've already gotten creditable service for that time.
00:34:27:20 - 00:34:58:02
Patrick Charles
The other key provision here for all veteran benefits, like this purchase of purchase time, is that you must be a member-in-service, retirees are not eligible members inactive are not eligible to make the buy back for military service. So what changes do we have to the veterans buy buyback? This rewrite of section 4(1)(h). One of the biggest, changes to this act is it eliminates the 180 day purchase requirement from chapter 71 of the acts of 1996.
00:34:58:04 - 00:35:22:17
Patrick Charles
This 180 day provision has always been very confusing for people because it is not and was never in chapter 32. It was always simply a component of chapter 71 of the acts of 1996, which was the act that originally included the paragraph concerning the buyback of prior military time under 4(1)(h), and so people didn't know where it was, didn't understand what it meant.
00:35:22:19 - 00:35:45:02
Patrick Charles
And basically the requirement was that a person had to be given notice of their eligibility, and they had 180 days to decide whether they wanted to buy their time. And they either had to, depending on how the system handled it, they either had to make payment within 180 days, make arrangements for payment, or simply acknowledge that they had time that they may in the future purchase.
00:35:45:04 - 00:36:08:20
Patrick Charles
It was treated differently from board to board and that caused a lot of inequity from system to system, frankly. And one of the reasons why the Hero act, these changes were pushed at the legislature 180 day does not matter anymore. You can pretend it never existed. As soon as all of the people that were exempted from it are corrected under this one time option, that I'll go over in a minute.
00:36:08:20 - 00:36:51:07
Patrick Charles
But essentially the 180 days is gone, does not matter anymore. The other requirement that it was never in 4(1)(h) before, is that this now requires that boards give notice of potential benefits to all new employees. So I even suggested in our memo to the boards, we suggest that as soon as someone signs up for the system and fills out their new benefit, new member enrollment forms, you hand them the explanation and the buyback form for veterans benefits so that they are aware that they are eligible and it has been updated to show new eligibility, new payment requirements for when the payments must be made.
00:36:51:09 - 00:37:14:22
Patrick Charles
The other change since we've eliminated the 180 day issue now, it provides that the purchase of the service must be made within one year of vesting, which essentially is 11 years of creditable service. One of the questions that we have gotten repeatedly, is it just 11 years or is it 11 years of actually working? It is 11 years of creditable service.
00:37:14:24 - 00:37:34:21
Patrick Charles
So that includes anything that was purchased in some other purchase. It was prior now and membership time that you may have purchased when you became a full member. Anything that counts towards creditable service, you have to calculate the 11 year from that. So it may only be 6 or 7 years of actually being a member of the system.
00:37:34:23 - 00:37:55:05
Patrick Charles
That will get you the 11 years of creditable service. I'll go into this a little more detail in a minute, but National Guard reserves, because of the nature of their service and the fact that they accrue service differently, they have a different purchase window. And the last bullet point here, new one year window for anyone who missed purchasing their service.
00:37:55:07 - 00:38:24:19
Patrick Charles
This is all of those people that either missed it, missed the opportunity to purchase because they were told they were ineligible because they hadn't done so within the 180 day window, or they simply just didn't have the money and decided they weren't even going to ask about buying it back because they couldn't do it at the time. So either way, no matter what, anyone that is a veteran who has not made their purchase gets a new one year window to purchase their service, regardless of the reason for why they have not purchased it prior.
00:38:24:21 - 00:38:46:17
Patrick Charles
On this slide, you'll just see highlighted all of the amendments to chapter 32, section 4(1)(h), the fourth paragraph, which is the veterans buyback paragraph. I'm not going to go over those. You can look at those just to see exactly where we're getting some of these concepts from. So as I said there's no 180 day window, you know, one year of vesting in the system.
00:38:46:19 - 00:39:07:06
Patrick Charles
Vesting is ten years of creditable service. And that applies to every group. I know that there is a provision in section five that allows a group four member who is over age 55, with less than ten years of service to receive a retirement allowance. That is not a vesting issue for them. That is simply a provision in section five.
00:39:07:08 - 00:39:18:19
Patrick Charles
The vesting under chapter 32 is ten years, and so it's effectively 11 years of creditable service to decide whether you want to purchase your military service.
00:39:18:21 - 00:39:41:01
Patrick Charles
So National Guard and reserves, just like everyone else, they can purchase up to four years of time. However, National Guard and reservists accrue time slightly differently sometimes because, as I mentioned before, you could have someone that that 18 year old that joins the Army right out of high school stays in until 22, then gets a public employee job after serving four full years.
00:39:41:07 - 00:40:06:22
Patrick Charles
They're a very easy situation. They get to buy four years. They want to because they had four years prior to becoming a member with National Guard and reservists. Oftentimes what we see is someone either spent sometime in the what I'll call the regular military, the full time military, but not four years. Then they were transferred to the reserves or the guard, and they serve many years after that.
00:40:06:24 - 00:40:31:18
Patrick Charles
But they may have become a public employee while they were a National Guardist or reservist, and they didn't have enough time to get the four year purchase. So those people will have a different amount, a different calculation of when they can buy their time. But the other situation that we often see is someone who joins the National Guard and reserves doesn't get activated, and thus doesn't qualify as a veteran until sometime while they are a public employee.
00:40:31:20 - 00:40:48:12
Patrick Charles
So you may be in the guard for 3 or 4 years and a public employee at the same time, completely overlapping. But until you get activated, you're not considered a veteran. So now they get deployed for, let's just say, a year for ease. They get deployed for a year, they come back, they keep working - well, now they're counted as a veteran.
00:40:48:12 - 00:41:05:04
Patrick Charles
They've got that one year of credit automatically. So we can subtract that from their total. But they're still going to need to work and be in the guard and reserves for a number of years before they're ever going to get the 5 to 1 ratio to be equal to four years. So that's a 20 year term in either one.
00:41:05:04 - 00:41:30:02
Patrick Charles
So they're going to get a different amount of time. So here's how they do it for National Guard or Reserves. If you don't qualify as a veteran by the time they reach within one year of vesting, or if you're not eligible for the full four year buyback, you're given additional time. You are given the later of two dates, five years from when they qualify as a veteran, or five years from the date that they qualify for the full four years of purchase.
00:41:30:04 - 00:41:52:07
Patrick Charles
So you may have someone that's in the system for over 20 years before they are even, before they their time, their five year window, even starts. That is entirely possible. You could also have a shorter period, because you may have where they had two years of prior military time in the full time military, and then they spent ten years in the reserves.
00:41:52:09 - 00:42:05:23
Patrick Charles
So you may be, a shorter distance, but it will still be five years out from that latter of the two dates. How does this one year grace period apply?
00:42:06:00 - 00:42:30:13
Patrick Charles
Members who missed the opportunity to purchase their military service will have a one year window. So this is from August 8th, 2024 is when the act was, effective. And so they have one year from that date to make arrangements with their board for their purchase. So they have until August 8th, 2025.
00:42:30:15 - 00:42:55:12
Patrick Charles
So here's what members need to do if you've already. If a member has already purchased a military service, they don't need to do anything. So any notice that you send them, they don't need to do anything with it. They're all set. They've made their purchase. Here's where you get into a couple of issues that we've had. Members have more than 11 years of creditable service, so they're already past the new time frame that would be allowed for the purchase.
00:42:55:14 - 00:43:17:17
Patrick Charles
So they have to come in. If they haven't done their buyback, they have to come in by August 8th, 2025 and enter into a purchase agreement before. This could be a lump sum or an installment plan depending on board policy. Now, we have said in our memo and we have sort of said at some of these trainings that some of these lump sum amounts could be fairly substantial if you're purchasing four years of service.
00:43:17:19 - 00:43:42:16
Patrick Charles
And so we encourage boards to offer installment plans. It is up to the board policy. I have gotten a number of questions on installment plans, and one of the questions that we get is I've gotten a number of board saying my board doesn't offer installment plans for any buyback. Can we do it just for veterans? Or if we allow veterans, do we then have to allow everyone to do buybacks under an installment plan?
00:43:42:18 - 00:44:07:00
Patrick Charles
The answer is yes. You can do an installment plan policy solely based on veterans time. And I've seen a couple of boards who have been in this situation. They've sent in supplemental regulations to us to review and to approve that says for veterans buybacks only, we will allow a three year or a five year installment policy. But again, this is a board policy.
00:44:07:00 - 00:44:30:05
Patrick Charles
But we would encourage installments because we have seen a number of situations where members may owe 30 $40,000 to purchase four years. And we understand that some systems allowed people to simply sign the form and say, yeah, I'm going to buy this sometime before I retire. And now the legislature has changed the goalpost. They have said, no, you need to do within 11 years or within one year.
00:44:30:05 - 00:44:53:07
Patrick Charles
If you're past that already, you need to do it within one year. And to come up with that 30 $40,000 by August 8th, 2020 5th May be an impossible burden for some. However, I would also tell everyone and make sure that the members are aware they can do these buybacks through a rollover. So if they have an IRA, they have a 401 K, they have a 457 smart plan.
00:44:53:13 - 00:45:19:21
Patrick Charles
They can do a rollover for that without tax consequences. And you can make the payment through that. Now if the member has less than 11 years of service, they have until one of the two dates, either they reach 11 years of service or August 8th, 2025, whichever is the later of the two. So if someone is only at eight years right now, they're going to have another three years before they have to enter into this installment agreement or make the lump sum purchase.
00:45:19:23 - 00:45:34:10
Patrick Charles
But if they are already at ten years, it's going to really depend on where that 11th year falls, whether it's before or after August 8th, 2025.
00:45:34:12 - 00:46:07:24
Patrick Charles
So here is what I was just talking about. What members need to do if they haven't completed the purchase and they're outside of the window, they need to complete the purchase or enter into the installment plan before either the end of their 11th year or August 8th, 2025, whichever last occurs. And again, we encourage boards to do installment plans, and if you have any questions about installment plans or allowing it or what regs look like, if you want to do a specific reg just for veterans buybacks to be allowed to be made that way, please contact me and I can give you some examples and walk you through that.
00:46:08:01 - 00:46:26:20
Patrick Charles
Now what do boards need to do? And I know many of you have already done this. I already got my letter from the state board, but the deadline is coming up very close. Soon every board must send a member to all active members of the retirement system, informing them that they may be eligible for military service buyback.
00:46:26:22 - 00:46:50:14
Patrick Charles
We provided a sample notice in memo 23. And so you can tweak that and use that. To be specific, you might want to put in something at the in the bottom there about whether it's a lump sum payment, an installment plan, contacting the retirement board. But you must send that notice to all members by November 6th, 2024.
00:46:50:16 - 00:47:09:16
Patrick Charles
You should also be notifying any member who you have who's previously completed the application, but it was not made. Arrange for the payment to make sure that they do so by the new deadlines, which again, is the later of their 11th year of service, or August 8th, 2025. If someone has already passed that, 11 years.
00:47:09:18 - 00:47:36:21
Patrick Charles
You should also review your board regs and see if there's anything. Veterans buyback I know some boards have veterans buyback regs that we'll talk about the 180 days that the purchase must be made in 180 days those regs are obviously no longer valid because that is not a requirement of the statute any longer. So you may want to look at either updating that reg or just repealing it and notifying us so that we can approve the new reg or remove the reg from our website.
00:47:36:21 - 00:48:00:20
Patrick Charles
And you should also begin using the updated Notice of Potential Benefits forms on our website. I highlight this again the notice issue. You must give notice to every new member when they enroll in the system, and you also need to send out that notice by November 6th, 2024 to every active employee in the system and start using the new forms.
00:48:00:22 - 00:48:21:11
Patrick Charles
A good point is to have that be part of the new member enrollment packet, the new form. And just because that has a summary of the benefits. And then the second page, I believe it's just the second page is the actual application. So just give them that packet so they're aware, that it's part of the the benefits that they may be eligible for.
00:48:21:11 - 00:48:54:07
Patrick Charles
I realize that a large number of employees are not veterans, so they are never going to be eligible for this benefit. But the fact is, we don't know who is a veteran when they start public employment. Even they may not acknowledge that they're a veteran. They may not check off any boxes or notify you that they're veteran. But also some people, like we talked about with the National Guard reserve, they may not be classified as a veteran when they start in your system, but I've seen members that were in the system for five, ten years before they even joined the reserves or the guard.
00:48:54:09 - 00:49:16:11
Patrick Charles
So they may never have qualified and not have been eligible. But by giving everyone notice, they will then know that if something changes or if they had not acknowledged that, that they may be eligible for veteran's benefit. Here's my contact information if you have any questions about any of these acts. As I mentioned, we will be issuing, I believe next week.
00:49:16:11 - 00:49:35:09
Patrick Charles
We'll be issuing a memo on the return to service process. The one thing I should have mentioned about the return to service process is that's one of these things that is going to be a lot of work for the member and for us to do these evaluations and to check the new, job descriptions. But it's not really going to be something that the boards are involved in.
00:49:35:09 - 00:49:52:11
Patrick Charles
You're not the boards are not involved in the return to service process until you're notified that someone is joining the system because they have been returned to service. But the actual evaluation getting all the medicals and everything, that is all the responsibility of the member and PERAC So that that's one good thing. But that memo will be out.
00:49:52:11 - 00:50:10:16
Patrick Charles
And then the Violent Act injury, which will have some substantial required points for the boards that will be released next week as well, hopefully. I will go and take some questions now.
00:50:10:18 - 00:50:20:16
Patrick Charles
00:50:20:18 - 00:50:55:13
Patrick Charles
Is MEPA a standardized evaluation. Would Retirement Office need you to do some type of salary assessment? Is MEPA the same if a city or town calls it reorganization? Okay. So the first part of this question does the, is it a standardized evaluation? I don't know how a MEPA study is conducted. I don't know if it looks the same and every time one is done, but yes, if there's a question about spiking and the board goes to the town and says, you know, this person looks like they spike, why did their pay increase?
00:50:55:13 - 00:51:21:01
Patrick Charles
And they say it was because of a MEPA study, then you should ask for, part of that study that at least reflects why that person’s salary or why that unit salary was increased. A reorganization, that's a trickier question because it doesn't necessarily if they just start changing everyone's job title and moving people from unit to unit and they get pay raises, that's not a systemic wage adjustment necessarily.
00:51:21:03 - 00:51:33:08
Patrick Charles
But, it could be a bona fide change in position. And so then you might have an exemption for spiking for that.
00:51:33:10 - 00:51:53:16
Patrick Charles
Another question traditionally, we've excluded raises pursuant to a salary study. Does a systemic wage adjustment language now to allow that? I would think that, yes, in some ways that would be if the salary study was done and it was done over a segment or over the entire employee population of an employer, and changes were made then.
00:51:53:16 - 00:52:14:22
Patrick Charles
Yes. That seems to be a systemic wage adjustment. It can't the systemic wage adjustment simply, it's very important to make sure that it's not just individual employees that are getting wages. It's not just that Bob Jones is very valued employee, and we don't want him to take a job in the next town over. So we're gonna give him $10,000 more a year.
00:52:14:22 - 00:52:37:24
Patrick Charles
It's, you know, Bob Jones and six other people all are underpaid compared to the neighboring towns. So we need to raise them all by 10,000. That would be a systemic wage adjustment. But if it's just to retain one employee, that's not a wage adjustment. That's an individualized wage adjustment.
00:52:38:01 - 00:52:47:21
Patrick Charles
In a post retirement earning do I use the salary as it’s being paid for the position now, or what the member would be earning if he had not been retired?
00:52:47:23 - 00:53:11:21
Patrick Charles
You use the salary for the position that is being paid for that position now. So you have a sergeant with so many different stipends and so forth, and the highest step retires. Then you take that same person that's currently working and use their salary. If you if that salary is lower than what the person's pension is based upon, then you use the salary that is used in the pension calculation.
00:53:11:23 - 00:53:34:03
Patrick Charles
It's the greater of the two.
00:53:34:05 - 00:53:56:10
Patrick Charles
So, for return to service from. I just lost it from Return to service from page six of the handout. What would happen if the members annuity account from the first system benefits that had been paid while they were out on disability and colas throughout that time? There's nothing that happens. The members account, if there's any money left in the account, gets transferred to the new system.
00:53:56:10 - 00:54:20:22
Patrick Charles
If they go back to a new system, just like any other transfer, there's no recoupment of any annuity paid or recruitment of any recoupment of any call. Is there anything that were paid as part of the disability? It's just person gets creditable service does not owe anything. Either comes back to that same system or goes to a second system and transfer just like a normal one who makes the determination of what is catastrophic.
00:54:20:22 - 00:54:45:09
Patrick Charles
The board, PERAC, the members attorney? Ultimately, the board has to make a determination whether this member is going to qualify under the violent excuse me, violent act injury bill, and they have to determine whether a catastrophic, life threatening or life altering, injury occurred. Now, our medical panel will be instructed to review that as well. And so you'll get evidence from the medical panel.
00:54:45:11 - 00:55:19:20
Patrick Charles
But as with all disabilities, the board is going to be responsible for making the determination as to whether someone qualifies based on the medical evidence, the medical panel, information that they receive, any other information that they get through a hearing, medical records, reviews. And one of the things that we will point out in our memo is that boards are going to be required to do findings of fact for any time they approve a violent act injury, and those findings of fact are going to have to show that the member,
00:55:19:22 - 00:55:41:07
Patrick Charles
That the that the member was in, suffered a catastrophic, life threatening, life altering injury, that there was a violent assault with a dangerous weapon. What the dangerous weapon was (excuse me). Why something qualifies as a dangerous weapon. And this is going to be key when you start looking at items that are not specifically listed, like a knife is listed.
00:55:41:07 - 00:56:02:07
Patrick Charles
But what about some other implement? You know, an automobile? In that case, you're going to have to show that not only was the member struck by an automobile, but that it was intentional. If someone is just rear ended in an accident, a negligent accident, that is not an intentional assault on that person, even though it may qualify as an assault under certain definitions.
00:56:02:07 - 00:56:23:20
Patrick Charles
But it is not under this statute, and this is all going to be laid out in more detail in the memo. But it's going to be the board that has to make all these determinations, and it's going to be the board based on all the available evidence and the evidence that our medical panel provides as well, in terms of our narrative, it will be a slightly different report than a simple straight, regular disability, application.
00:56:24:02 - 00:56:45:02
Bill Keefe
Patrick. It's Bill. Just to add on to what you're saying, I think we might just want to let people know that we want to engage in a regulatory process around this, have hearings, let people be heard, everybody can weigh in and we can try to come to a better definition of some of these terms.
00:56:45:04 - 00:56:55:13
Patrick Charles
Right. We will go through a regulatory process at some point in the future.
00:56:55:15 - 00:57:13:20
Patrick Charles
If a police officer attempting to subdue a suspect and the suspect strikes the officer over the head with a large stone, which results in the officer's death, he doesn't qualify for the 100%. Well, two things here. One, he probably is going to qualify for 100%, but it's not going to be under section seven Violent Act disability because the officer has died.
00:57:14:01 - 00:57:53:17
Patrick Charles
So he will qualify under a section 100. And that is 100% benefit. But and let's say the member doesn't die, it's a very strong question as to whether this would be, he'd be eligible for this because the large stone is not a dangerous weapon designed with the purpose of killing or causing injury or death. If the member, the member is still receiving 100% when they pass away, and then spouse gets 75 of that, will it go down once the member would have turned retirement age or will it always stay the same.
00:57:53:19 - 00:58:14:14
Patrick Charles
I have to look that up because I think that it reduces, but I have to make sure before I answer that, shoot me an email with that and I can answer it, but I think it's addressed in our memo. But I don't remember exactly how we phrased that. If a board doesn't make a new member aware of the reference time and the member transfers to another system, does the first board take the liability?
00:58:14:16 - 00:58:21:15
Patrick Charles
If they can't show proof that the new member is aware of the veterans time, no.
00:58:21:17 - 00:58:27:20
Patrick Charles
To whom?
00:58:27:22 - 00:58:50:16
Patrick Charles
Do National Guard members who qualify as veterans have DD214’s or something else showing the service? So if a National Guard member is going to qualify as a veteran, they must have a DD214 that shows that they have the required active duty time anytime they were activated that would qualify them as a veteran, meaning that they had to have 90 days of active duty, one of which is war time, or 180 days of active duty non training time.
00:58:50:16 - 00:59:13:15
Patrick Charles
For both of those, they have to have a DD214 to show that otherwise they're not going to be classified as a veteran. They would also have in the National Guard they would have something called an NGB 22 form. That is a form that shows their total reserve time. So you may have the you may have 1 or 2 different, DD214’s that show that they were active duty for a period of time over there, say 20 years in the guard.
00:59:13:17 - 00:59:38:09
Patrick Charles
And then you'll see an NGB 22 form that will list, you know, 20 years total service in the guard. And they'll also have a category on there that I'll say something like, prior activation time, prior inactive duty. And there's a couple other categories, but it's all going to be on this NGB 22 form the people in the Army Reserves, Navy Reserves, they'll have another form.
00:59:38:09 - 01:00:04:17
Patrick Charles
I think it's a form 256 but some of the services have their own version of these forms that, you can extrapolate from their dates on each year and the points that they receive as to whether or not they were in the reserves for that period, and that you can calculate, how much total time they have.
01:00:04:19 - 01:00:25:11
Patrick Charles
If a member is out on administrative leave, can they still purchase military time? It's unclear why the leave was imposed. However, it is likely behavioral if they are still carried as a member in service in the system, then yes, they can make the purchase.
01:00:25:13 - 01:00:55:10
Patrick Charles
I have a member who's exploring this, but his disability is not even close. Plus he's been on disability for 15 years. No. A member cannot get this violent act injury unless they have not been approved for disability as of October 29th, 2024. So if someone was injured six months ago and haven't been approved for disability, and now your board is processing their application, they will be able to go for the 100% disability.
01:00:55:12 - 01:01:29:19
Patrick Charles
If someone has got approved for disability six months ago and it would have qualified, they are not eligible to have their benefit recalculated. The eligibility for this goes forward to any benefit that is approved, which means approved by the board and approved by PERAC A final approval by PERAC after October 29th, 2024.
01:01:35:11 - 01:01:58:21
Patrick Charles
Has PERAC ever considered seeking a remedy for the inequity whereby National Guard members get no credit at all if not on active duty while a teenager working for the Newton Park Department for a certain job gets retirement credit for that. That is an inequity. We have not pushed anything and seen any. I have not seen any bills or anything that would change the definition of veteran to allow for this.
01:01:58:21 - 01:02:20:09
Patrick Charles
This question did come up a number of years ago, because I believe it was when President Obama was still in office. They changed the definition for federal benefits to include National Guard members who have 20 years of total time in the guard, regardless of active duty time. But that was never a change that was adopted by the legislature.
01:02:20:09 - 01:02:47:09
Patrick Charles
And so the statute has still been the same, so I don't know if there's any movement to that or if there's anyone that's even proposed that I've never seen it. Let's see, what if a member joined the system in 1995, left for several years, and then came back? 6/22/2009 what annual salary should be used? This member left funds in the retirement system if they did not withdraw their funds.
01:02:47:09 - 01:03:08:24
Patrick Charles
You use a salary from when they join the system. In 1995. Yeah, I'm assuming this is talking about the purchase of veterans time. So any time that there is money left on account or a transfer from system to system, you use the first system salary or the first salary, it's only if they withdraw, then they have severed their membership and severed their rights.
01:03:09:01 - 01:03:24:06
Patrick Charles
And so they would then have the new salary being used.
01:03:24:08 - 01:03:42:05
Patrick Charles
I'm not sure I understand this question. So the person who asks if a member retires a few years later wants to return to work. Wouldn’t we use a salary of the same green step for that position, rather than what's being paid to the person that currently holds position. I'm not sure what that's in context. If you want to email me directly, I can try to respond to that.
01:03:51:12 - 01:04:07:05
Patrick Charles
That seems to be most of the questions that I can answer today. Are there any other questions? Please let me know. Oh, I see another one.
01:04:07:07 - 01:04:32:14
Patrick Charles
How are we to research if someone were adjusted due to anti spiking. So if you do a calculation and you do the anti spiking calculation and you determine that there appears to be a spiking because the salary increase over the last three years by x amount and it's triggering the 10% spiking, you should contact the employer to find out why that pay was spike, why that pay was increased to that level.
01:04:32:16 - 01:04:49:11
Patrick Charles
And if they tell you it's from a MEPA study, then you ask for the MEPA study so that you can see that that's why the pay was, increased. If they say you can ask them specifically, was there a systemic wage adjustment? Was this a one person salary adjustment or did you adjust everyone in a unit or something?
01:04:49:15 - 01:05:10:24
Patrick Charles
You can ask them that and find out, get the information from that, get some payroll on that. They can point to the members because you'll have member contributions from a number of people if they're all in the same unit and they're all getting this, you can back into it essentially.
01:05:11:01 - 01:05:19:05
Patrick Charles
Okay.
01:05:19:07 - 01:05:49:07
Patrick Charles
Okay. So here's a question about looking at DD214’S. For vets that have more than one DD214 will you take a look at them to be sure the proper service is being calculated? I am happy to help anyone who has a tricky question with DD214’s, but the boards can certainly certify that someone is a veteran, so for instance, if someone has one DD214 and it says that they have exactly four years of military service with the United States Army, you do not need to send that to PERAC for certification that that person is eligible for four years.
01:05:49:09 - 01:06:15:07
Patrick Charles
The board is certainly capable and empowered to just announce that person has four years of military service. I understand that when you have a number of people who have National Guard reserve time, they have DD214’s, they have overlapping service. That could be an issue. They can be very tricky. And if you do try to figure out what it is and you have a question about it, please contact me and I will help.
01:06:15:09 - 01:06:45:19
Patrick Charles
But you know, a lot of these DD214’s are straightforward and PERAC does not need to certify it to anyone. The board can certainly do that. I have another question here about this National Guard issue. Did you say that active duty needs to be subtracted from National Guard time if they overlap? Okay. So. When you do a calculation of how much time of purchase a person can purchase and you're trying to determine the 5 to 1 ratio.
01:06:45:21 - 01:07:14:01
Patrick Charles
Now it's important to note that under normal situations and buybacks and this is true for military buybacks for someone was in the military prior to joining the system. It's a pretty straightforward. They're not getting any creditable service at all for any period of time that's associated with that military service. So in my example that I used 18 year old to 22 year olds in the service and then joins the system at 22, none of that time overlaps with anything he's getting creditable service for.
01:07:14:01 - 01:07:35:21
Patrick Charles
So it's straight four years. You can buy four years. There's no nothing. There's no overlapping the issue with National Guard and Reserve. This is they that provision applies at a 5 to 1 ratio for anyone who is a former or present National Guard member. So that means that you can be accruing veterans buyback time while you are a public employee.
01:07:35:23 - 01:08:04:06
Patrick Charles
So you start work on January 1st, 2024, and you join the National Guard on January 1st, 2024. You can work for the first 20 years and be accruing credit time at the 5 to 1 ratio that you would be able to purchase, assuming that you qualify as a veteran. So in a situation where a member is a public employee and gets activated, let's use the example where okay, I start July January 1st, 2024.
01:08:04:08 - 01:08:29:12
Patrick Charles
On January 1st, 2025, I get activated for the entire year of 2025. On January 1st, 2026, I come back to work. The system will credit me for one year of creditable service. For the time, I was on military leave from my public employment, because you get military leave time, if you leave public employment, go on active duty and then return to public employment, you have to be given creditable service.
01:08:29:14 - 01:09:01:16
Patrick Charles
And that's where the whole special military fund, the town has to make the contributions that would have been made. And that's all covered in a much longer veterans webinar. But you will get that credit now, 20 years later when you leave the guard and now you're ready to buy your four years because you think you've got your 20 years, what you have to do when calculating that that total time to take the 5 to 1, you have to subtract out that time that you they were a public employee who left for active duty.
01:09:01:20 - 01:09:21:23
Patrick Charles
And when they came back, they got creditable service day for day for that time. So in my scenario that year of 2025, I already got creditable service for it. So when you calculate my 5 to 1 ratio and I have exactly 20 years, I don't have exactly 20 years, I have 19 years. You have to subtract that out.
01:09:22:00 - 01:09:42:08
Patrick Charles
And so you'll be slightly less than four years of purchase. Now, if someone has well over 20 years and they only have 1 or 2 activations and it's not, you're still going to get the 4 to 1 ratio. But the 5 to 1 ratio equaling four years. But you do have to subtract out any time that you've already gotten full credit for.
01:09:50:08 - 01:10:19:20
Patrick Charles
What if someone was hired as a call firefighter, then made permanent several years later? Do we use the annual salary as a call firefighter if that person was made a member of your system as a call firefighter, then yes. If they were simply a call firefighter who was not a member of the retirement system and didn't get creditable service until they became a full time member of the fire department, you'd use their full time salary, but if they were made a member and there are a few systems out there that make call firefighters members of the system, that is, you take their annual salary for that, year of call, firefighter
01:10:19:20 - 01:10:24:20
Patrick Charles
time.
01:10:24:22 - 01:10:49:15
Patrick Charles
Does does enter into a payment plan necessarily mean that the first payment needs to be made by August 8th, 2025? If you have agreed to a payment plan and that payment plan is finalized by that date, then that's fine, but the payment should start as soon as possible. After that, it can't be that you entered into a payment plan on August 7th, but the payments don't start till December of the year.
01:10:49:15 - 01:11:08:10
Patrick Charles
They have to start, you know, the next monthly, opportunity or the next pay opportunity or whatever. The earliest that you could set up, especially if you're doing a payroll deduction or if you're, however you're doing the payment. I'm not sure exactly how boards get the payment, whether it's through payroll deductions, whether it's always through a check by the member.
01:11:08:12 - 01:11:29:17
Patrick Charles
I don't know that,
01:11:29:19 - 01:12:00:21
Patrick Charles
So here's the actually a question or a comment about DD214 where if someone says if you have multiple, I would use the last one issued because block 12D on the DD214 will show the aggregate of prior active service. That'll be added. The extras listed in block 12C. That is a good estimate, but you should have copies of every DD214 and make sure that each one is complete and has, the honorable discharge or character of service being classified as honorable.
01:12:01:02 - 01:12:25:02
Patrick Charles
But you also need to look to make sure that if the person's guard or reserve active duty, that it's not a training DD214, because oftentimes you'll see guard in Nash and reservists who have four DD214, three of which for are for active duty and one of which is active duty training. And you have to not use that in calculating the the buyback until you use the 5 to 1.
01:12:49:14 - 01:13:11:03
Patrick Charles
There's another question about going on leave, and I'm going to cheat here. Pull up chapter 32, because I want a quick answer it because it's a good question.
01:13:11:05 - 01:13:29:10
Patrick Charles
So the question is, if a member is a reserve and called up to military service, is out for a year and then comes back to work, does he have to come back to the same board to earn that year of service, or lose it if he goes to a different board? 4(1)(h). The third paragraph describes what happens when you go on military leave and how you get credit when you come back.
01:13:29:12 - 01:13:34:02
Patrick Charles
And it says that,
01:13:34:04 - 01:13:51:24
Patrick Charles
You don't get creditable service when employed in any governmental unit in a position which is subject to section one of 28. So it can be in your former position or in a similar position or employed in any governmental unit. So you would get the credit regardless of, where you rejoined.
01:14:00:03 - 01:14:24:04
Patrick Charles
If someone starts with a new board less with less than a year, and came in as a transfer from another board with three years, do I use the first year of the prior board for the 10% buyback? Yes. You do as long as the key word in your question was transferred. If it was a transfer, you always go back to that initial first year payment to determine.
01:14:24:06 - 01:14:45:17
Patrick Charles
If a member is currently on military leave and is expected to come back in February 2025, not sure if the orders will get extended. Is there any way to get additional time to purchase beyond August 8th, 2025? He has four years of eligible military service and 11 years of credit. The statute does not provide a mechanism for there to be an extension.
01:14:45:19 - 01:15:17:11
Patrick Charles
So he's going to be subject to the August 8th, 2025 deadline to enter into the installment plan or the lump sum, depending on your board and what it is required, what requirements they have.
01:15:17:13 - 01:15:25:15
Patrick Charles
Know.
01:15:25:17 - 01:16:05:05
Patrick Charles
On military buyback. If you're buying back, say, four years of service and one of the years was in a combat zone, does the member pay for that year deployed in a combat zone? If this is prior military service that predates your public employment, you pay for it just like any other year of, buyback. If you are an active member of the system and you get activated and get sent to a combat zone, the payment for your creditable service for that year is done through the special military fund, and the employer is responsible for making the payment into the special military fund of what you would have contributed.
01:16:05:07 - 01:16:30:05
Patrick Charles
However, there are some communities who when someone gets activated, they pay either part or all of their public employee salary to them while they are also on leave. In those instances, that salary that you're being actually paid by your employer is treated just as a regular employee salary and as if you were not gone on military leave and contributions would come out of your pay for that.
01:16:30:07 - 01:17:16:18
Patrick Charles
So if you're getting some people get the difference between their military pay and their civilian pay, the employer pays that deductions would come out of that amount, and then the remainder of your salary that would have had deductions taken, the special military fund has to be credited with that by the employer when you return to public employment.
01:17:16:20 - 01:17:39:19
Patrick Charles
Okay. That's all the questions that I see. If anyone has any further questions, you had my contact information on the last slide, and I believe that was sent to you also. And I think a number of you probably know who I am at this point. So feel free to email me or give me a call. I don't know if Bill is going to jump on or.
01:17:39:21 - 01:18:05:19
Bill Keefe
Trying to get my video up. Here we go. Thank you Patrick. That's a lot of work. Thank you for all your answers to the questions. Thank you to everybody for, participating and all of your interest. We certainly understand the last couple months here, there's been a lot of legislative changes, that have resulted in a lot of, chapter 32 changes, a lot of memos.
01:18:05:21 - 01:18:33:08
Bill Keefe
We're certainly cognizant of that. And thank you for your, your work and your collaboration on this. I would just like to reiterate what Patrick mentioned earlier about the installment plans on the veterans buyback. Understanding the terms and the conditions of a buyback are ultimately the purview of boards. We would encourage it in those instances where an open ended period had been allowed.
01:18:33:10 - 01:18:56:14
Bill Keefe
It's certainly a unique circumstance. Somebody might think they have 20, 25, 30 years to make this payment. And now all of a sudden they're told they have to do it in a year. Certainly if they have a, SMART plan A401K, an IRA, what have you, they can do a rollover, maybe their savings. You know, I guess worst case, somebody could try to do a loan.
01:18:56:14 - 01:19:20:10
Bill Keefe
From what I understand, at least in the public safety world there is a credit union I think that's putting together a potential loan program for something like this. There may be others that that deal with, public employees. If your board doesn't do installments as a, as a rule, you could do a supplemental reg just for this unique circumstance.
01:19:20:12 - 01:19:50:18
Bill Keefe
We had also heard a little bit about the, the logistical issues, the difficulties with doing installment plans. I just spoke with Patrick and John Boorack on this yesterday. You don't have to worry about changing rates. You know, generally, there's not an interest charge to a veterans buyback, although I guess there's administrative law cases that say in an installment plan, regular interest can be charged, which has been 0.1% for a long time.
01:19:50:20 - 01:20:18:01
Bill Keefe
But when that installment plan is set, it's the amount of money owed. You know, if you're going to include the point 1% over however many months and that's it, it doesn't need to change from that point going forward. So I hope that that might take some, add some clarification. I'm not sure that, like I said, I had heard a little bit of, scuttlebutt that there was some, some problems or logistical issues with doing it.
01:20:18:03 - 01:20:44:11
Bill Keefe
You know, this certainly could provide some hardship to people that, the intent here is to let more veterans, as many veterans as possible, get what the people of Massachusetts, through their elected officials, have deemed a benefit they've earned and deserve. So, just a friendly suggestion to, those boards and those, situations. So appreciate it.
01:20:44:13 - 01:20:50:13
Bill Keefe
With that, on to Patrick or Natasha, if anything else.
01:20:50:15 - 01:20:51:06
Natacha Dunker
Thank you everyone.
01:20:51:06 - 01:20:52:09
Patrick Charles
Thank you everyone.
01:20:52:11 - 01:21:00:15
Bill Keefe
Thanks. This will be, this is recorded, right. This will be posted. And yes. Yeah. So presentation will be posted. So yes. All right. Thanks all.
01:21:00:17 - 01:21:09:12
Natacha Dunker
The handout is already on the website. If anyone want missed the download in the chat. Take care! Have a great afternoon!